Railroads Brace for Wage Hikes on Panel’s Plan to Avert Strike

A presidential panel’s wage-and-bonus recommendations to head off a potential US railroad strike may be more costly than some railroads -- as well as their investors and customers -- were counting on.

The Presidential Emergency Board recommended a 24% compounded wage hike by 2024 and $5,000 in bonuses, including some retroactive elements, according to the Association of American Railroads. Investors should plan for more wage inflation than expected after the board essentially split the difference between what railroads offered and what negotiators for 115,000 rail workers sought, Susquehanna analyst Bascome Majors wrote Wednesday.

The wage gain would be the largest ...